V2 Cigs and National Tobacco Company Announce Strategic Partnership

MIAMI, FL--(Marketwired - Apr 23, 2013) - V2 Cigs®, America's largest volume online retailer of electronic cigarettes, announced today a strategic partnership with National Tobacco Company (NTC), distributor of the iconic Zig-Zag® and Beech-Nut® brands. The two companies have joined forces in the development of a new line of electronic cigarette products for the retail market. The new products will debut at this year's NATO show in Las Vegas, Nevada.

The new line will feature a redesigned V2 Cigs Disposable model that will be sold alongside V2's new rechargeable Express Kits and refill cartomizer products. Products will be showcased in a variety of multi-product display units designed to stand out on the counters of C-Store and Tobacco retailers.

"The new disposable electronic cigarette models in this line offer a major step forward in consumer experience provided by its vapor and battery performance," said Dan Recio, President of Business Development at V2 Cigs. "Additionally they feature a soft and pliable form factor to more closely mimic the traditional smoking experience. Our new disposables have been focus group tested against the other major retail brands. Over a 3-day trial period with the same consumers, the new V2 disposable was rated the best in overall experience, and the most likely to result in a repeat purchase. These new models feature over 400 puffs, with an aggressive MSRP while maintaining the integrity of trade margins. This allows us to offer a far more competitive value proposition than anything else currently on the market. Some brands boast that their disposables feel the most like a real cigarette -- what good is that if it only has enough puffs to last a few hours?"

The new partnership will bring the V2 Cigs line of electronic cigarette products to a greatly expanded list of retailers across the nation. National Tobacco Company will become the exclusive marketer and distributor of V2 Cigs products in domestic C-Stores and other retail outlets.

"NTC products are currently sold in over 150,000 retail locations in the United States," said Graham Purdy, Vice President of Sales and Trade Marketing for NTC. "We are very excited to add the V2 Cigs brand to our product arsenal. The manufacturing and online marketing power of V2 Cigs complements NTC's extensive field sales organization and account management teams. This strategic partnership will allow retailers to tap into a significant portion of adult electronic cigarette consumers that can only find their brand today in the online environment. This represents a perfect synergy."

With more than one million customers spread evenly across the country, V2 Cigs is perfectly positioned to drive online buyers into traditional retail outlets. The company will soon be adding a store locator to its web site at v2cigs.com, and a downloadable mobile app to help existing V2 Cigs customers find their favorite products at local retail stores. V2 Cigs products are already sold in a variety of national retailers, such as HESS gas stations and Pilot Truck Stops, but the rate of retail deployment will increase significantly as a result of the new partnership. NTC and V2 Cigs expect to expand distribution to no less than 30,000 additional retail locations this year alone.

V2 Cigs will support its retail expansion with an extensive marketing program that includes TV and radio advertising, local promotional couponing, on-site demo teams and product demonstrations, free samples, zip-code targeted direct mailings, Sunday newspaper inserts and coupons, and web, mobile and event promotion. V2 Cigs will also provide retailers with a wide array of merchandising options, including small-footprint countertop displays.

"Over the past few years, traditional retail brands have been transitioning online, today we are seeing a new trend with the most successful online brands moving into retail," said Andries Verleur, CEO of V2 Cigs. "2013 was already on track to be our best year, but post-NTC it's likely we could exceed our own best projections by up to 30%. It's time to show the competition the power of Internet dominance. This partnership will demonstrate the competitive power of developing high-demand brands on the internet and making them available to a wider audience at retail. Our intent is to drive retail sales. V2 Cigs is setting the standard for quality, because, for the last 4 years, we spent our resources refining our quality control and manufacturing techniques. By delaying the high cost of traditional retail deployment, with its inherently low margins, we built a rapidly scalable and more vertically integrated supply chain than any of our competitors. With NTC running offense, we can maintain our focus on product quality -- we don't have to reinvent the wheel."

"The partnership with V2 Cigs allows both companies to build upon their mutual strengths," said NTC President and CEO Larry Wexler. "We are combining V2 Cigs' excellence in product design and manufacturing with National Tobacco's record of innovative introductions such as Stoker's Moist Snuff Tubs and Zig-Zag Cigar Make Your Own Systems. This will provide our trade partners with a proven winner now only available on the internet and allow them to profitably participate in the rapidly growing electronic cigarette segment with a product providing great consumer value."

Bonnie Herzog, analyst for Wells Fargo Securities, estimates the e-cigarette category will surpass the one-billion dollar sales threshold in 2013 as more adult consumers migrate from traditional cigarettes to the innovative e-cigarette format. Continued exponential growth is expected as the category gains momentum in the marketplace.

About V2 Cigs. V2 Cigs is the flagship brand of VMR Products LLC. V2Cigs.com, the brand's online store, receives over 6million unique monthly visitors. With more than 1-million customers, V2 Cigs is also the world's largest online retailer of e-cigs, averaging over 4,000 online orders per day in the United States. The company's web-site V2Cigs.com is one of America's top 2,000 websites according to leading web-metrics provider Alexa.com. VMR also produces Vapor Couture (vaporcouture.com), the only electronic cigarette brand for fashionable women.

For more information about V2 Cigs, please visit http://www.v2cigs.com, or National Media Contact: Alex Schreer 305.515.2987

About National Tobacco Co, L.P. National Tobacco Company is an innovative marketer and manufacturer of tobacco products in the cigar, cigar wraps, moist snuff, loose leaf, MYO cigarettes and pipe tobacco categories. NTC distributes over 150 tobacco products from a brand portfolio that includes Zig-Zag®, Stoker's® and Beech-Nut®. National Tobacco is currently the leading distributor of cigarette papers and cigar wraps, and the #2 distributor of loose leaf chewing tobacco in the US. For more information, visit http://www.zigzag.com